With the hiring landscape constantly evolving, organisations are adapting and finding innovative ways of sharing leadership responsibilities. One such practice is Fractional Leadership. Fractional leaders fill part-time or short-term leadership positions in an organisation. Often they will be covering situations such as:
- The company is still in its early days, therefore, doesn’t have budget for full-time executives
- To cover unexpected vacancies or vacancies that are difficult or expensive to fill
- Assisting with coaching or training of less experienced leaders
Organisations are increasingly using fractional leaders to plug gaps in leadership, to get the leadership they need without the associated c-suite costs, and also, to fill roles that might only be part-time. These leaders often work elsewhere, as they’re only needed on a part-time basis.
What are the advantages of this practice?
One of the most significant reasons for fractional leaders is the cost. Hiring a full-time c-suite executive can be prohibitively expensive, particularly for start-ups. However, having an experienced executive focusing on specific tasks is highly valuable and can help younger organisations grow. As a concept, it’s becoming an effective way to scale and grow your business without the risk or commitment of hiring a full-time c-suite executive.
In the US, the average top executive salary is $202,634, with a range of $180,408 – $204,879. This level of compensation is often way above what some organisations can afford. This is where a fractional leader could be an ideal solution. Because they are either part-time or non-permanent, the remuneration package will be significantly less, however, they will still bring the expertise your company needs and will be able to help scale and/or grow your business.
Fractional leaders’ time is scarce – so they tend to only focus on tasks that require their expertise. These leaders aren’t typically seeking to further their career or gain a new job title.
They’re there to focus solely on the required tasks, ensuring that the business benefits from their skills and experience. Doing so will be a great asset in helping the company scale or filling a temporary leadership gap.
Another advantage of fractional leaders is that you can adjust their capacity. For bootstrapped organisations who don’t have huge budgets, this is ideal. They can get the support and experience they need without having to sign up executives long-term. Experienced executives often have experience in numerous industries. They have skills and ideas gained in other settings that might add value to a new business.
If the position you’re hiring for is a new one, using fractional leadership could be a great option for you. As there’s no full-time contract, it can be a useful test of the position – does it add significant value? Is part-time enough for this role? You can test your requirements with fractional leadership, allowing better insight into how certain roles in your organisation work. It provides useful flexibility in positions that are normally quite inflexible.
What is the difference between a fractional leader and a consultant?
Generally speaking, consultants assist businesses with improving things like procedures and processes. Operational assistance is not typically what consultants involve themselves with. A fractional leader’s job however, is to involve themselves directly with the running of the business. Another difference is that an experienced executive will be able to implement change and bring about a fresh perspective. Growing or scaling an organisation can be overwhelming, so fresh ideas and experience with adopting new technologies or policies can breathe new life in a company. C-suite level executives will be experienced in those areas, a consultant may not have had the same experience or success in those areas.
What kinds of fractional leaders are there?
C-suite executives account for a number of leadership positions in an organisation. This article outlines a number of the most common c-suite positions. Although most leadership roles are important, if budget is lacking or the role only needs part-time or temporary attention, a fractional leader could be the answer. Some of the more frequently mentioned positions include:
- CEO (Chief Executive Officer)
- CFO (Chief Financial Officer)
- CMO (Chief Marketing Officer)
- CTO (Chief Technology Officer)
- CHRO (Chief Human Resources Officer)
Are there any drawbacks of fractional leaders?
Although they can be a huge benefit to some organisations, there can be issues around having fractional leaders. They can be difficult to find and the nature of fractional leadership (short-term or part-time) may not be what some executives are seeking. As fractional leaders are almost exclusively for high-level positions, the remuneration required might be more than you’d anticipated.
Full time executives need to be disciplined and focused for how they use fractional leaders; the latter may initially be value for money, but not if specific objectives and deliverables are not continually set and assessed.
Hiring a fractional executive could be confusing to your team if your organisation normally advertises vacancies internally first. Explain how the position will work and why the decision to have a fractional leader has been made. If hiring to fill a gap, or help further the business, explaining to your employees that the skills and experience being brought in may help create better opportunities for them later down the line.
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